Spain seen as renewables honeypot by investors

The UK has slid down the league table while Spain retains the top spot as the most attractive bet when it comes to investing in renewable energy.

Wind energy is still seen as the most attractive renewable source to financiers

Consultants Ernst & Young have released quarterly figures showing where the bulk of capital investment into renewable energy is going and which countries are seen as most desirable locations by the money men.

This time last year Spain and the UK jointly held first place but now Britain is trailing in fourth.

Spain's success is put down to the dual factors of drought driving up the price of normally cheap hydro power and rapidly increasing capacity of turbines.

The UK's position is slipping due to the ever-present bugbear of planning issues, but its descent is slowed by a largely-untapped excellent wind regime and the potential for large-scale projects looming on the horizon.

Italy has soared up the table to number six, largely because of very high prices for energy from conventional sources.

The onshore wind sector continues to be the focus for financiers interested in renewables and as the industry matures it is being seen as less of a gamble and more of a sound investment opportunity.

"The appetite of private equity for the wind sector continues to increase, as demonstrated ... by a variety of large transactions in the German market and a major transaction in the UK which included the first non-utility balance sheet funding of an offshore windfarm," says the report.

"As the technology specific construction and operating risks become better understood, investors are increasingly likely to appraise wind opportunities on a global basis.

The future also looks bright for offshore wind, which looks set to garner a growing share of the market as densely populated countries at the forefront of wind farming such as Germany approach saturation point with their onshore projects.